Business Context and Reporting Period
This Form 8-K, filed on February 15, 2017, by American Express Company, provides Regulation FD disclosure regarding delinquency and write-off statistics. The data covers the U.S. Consumer Services (USCS) and U.S. Small Business Card Member lending portfolios for the months ended November 30, 2016, December 31, 2016, and January 31, 2017.
Key Financial Metrics
USCS Card Member Loans:
- Total loans: $47.3 billion (January 2017), down from $48.8 billion in December 2016.
- 30 days past due loans: 1.2% of total (January 2017), up from 1.1% in prior months.
- Net write-off rate (principal only): 1.5% for all three reported months.
U.S. Small Business Card Member Loans:
- Total loans: $9.5 billion (January 2017), stable from December 2016.
- 30 days past due loans: 1.2% of total (January 2017), up from 1.1% in prior months.
- Net write-off rate (principal only): 1.4% (January 2017), down from 1.6% in December 2016 and up from 1.2% in November 2016.
Total U.S. Consumer and Small Business Card Member Loans:
- Combined total loans: $56.8 billion (January 2017), down from $58.2 billion in December 2016.
American Express Credit Account Master Trust (Lending Trust):
- Ending total principal balance: $24.4 billion (January 2017).
- Annualized default rate, net of recoveries: 1.2% (January 2017), up from 1.1% in prior months.
- Total 30+ days delinquent: $0.2 billion for all three months.
Material Changes Versus Prior Period
From December 2016 to January 2017, total loans for both USCS and Small Business segments declined or remained flat, while delinquency rates (30 days past due) increased slightly from 1.1% to 1.2% for both segments. The Small Business net write-off rate improved to 1.4% in January from 1.6% in December. The Lending Trust saw a decrease in ending principal balance to $24.4 billion and an increase in the annualized default rate to 1.2%.
Guidance, Outlook, and Risks
The filing does not provide forward-looking guidance, management commentary on future performance, or specific risk factors beyond the disclosure of credit statistics. It notes that the Lending Trust's credit performance may differ from the total portfolios due to differences in loan mix, vintage, aging, and calculation mechanics (e.g., end-of-period balances vs. average balances).
Important Facts for Investors to Verify
- Confirm the trend of increasing delinquency rates (1.2%) in both USCS and Small Business portfolios in January 2017.
- Verify the decline in total loan balances for USCS and the Lending Trust in January 2017.
- Review the volatility in Small Business net write-off rates (1.2% to 1.6% to 1.4%) over the three-month period.
- Understand the distinction between the reported portfolio statistics and the Lending Trust data, as they are not directly comparable due to calculation differences.